AWARD OF THE TRIBUNAL IN THE FIRST PHASE

Transcription

1 ARBITRATION BETWEEN NEWFOUNDLAND AND LABRADOR AND NOVA SCOTIA CONCERNING PORTIONS OF THE LIMITS OF THEIR OFFSHORE AREAS AS DEFINED IN THE CANADA-NOVA SCOTIA OFFSHORE PETROLEUM RESOURCES ACCORD IMPLEMENTATION ACT AND THE CANADA-NEWFOUNDLAND ATLANTIC ACCORD IMPLEMENTATION ACT AWARD OF THE TRIBUNAL IN THE FIRST PHASE Ottawa, May17, 2001

2 Table of Contents PARAGRAPH 1. The Establishment of the Tribunal and its Terms of Reference The Arbitration Proceedings The Applicable Law 3.1 (a) Requirements under Canadian Law for a Binding Agreement on Maritime Boundaries 3.5 (b) Requirements under International Law for a Binding Agreement on Maritime Boundaries 3.10 (c) With such Modifications as the Circumstances Require 3.25 (d) Conclusion The Joint Statement of September 30, The Communiqué of June 18, (a) (b) The Work of the Joint Mineral Resources Committee (JMRC), The Communiqué of Atlantic Premiers and the Vice-Premier of Québec, June 18, The Subsequent Practice of the Parties 6.1 (a) Further Negotiations for an Offshore Settlement after (b) The Oil Permit Practice 6.7 (c) The Establishment of a Southeasterly Line from Point The Tribunal s Conclusions 7.1 1

3 In the case concerning the delimitation of portions of the offshore areas between the Province of Nova Scotia and the Province of Newfoundland and Labrador THE TRIBUNAL Mr. Gérard V. LA FOREST, Chairperson Mr. Leonard H. LEGAULT, Member, and Dr. James R. CRAWFORD, Member Registrar: Ms. Heather M. HOBART Technical Expert: Mr. David H. GRAY For Nova Scotia Government Representatives: Counsel: Advisors: The Honourable John Hamm, Province of Nova Scotia, The Honourable Gordon Balser, Minister of Economic Development of the Nova Scotia Petroleum Directorate, Dr. Patricia Waring-Ripley, Deputy Minister, Intergovernmental Affairs, Ms. Margaret L. MacInnis, Chief Executive Officer, Office of Aboriginal Affairs. Mtre. L. Yves Fortier, Ogilvy Renault, as Agent and Counsel, Mtre. Stephen L. Drymer, Ogilvy Renault, as Deputy Agent and Counsel, Mtre. Valerie Hughes, Ogilvy Renault, Mtre. Jean G. Bertrand, Ogilvy Renault, Professor Phillip M. Saunders, Dalhousie University, Faculty of Law. Mtre. François Mathys, Professor, Faculté de droit de l Université de Montréal, Professor Dawn Russell, Dean, Dalhousie University, Faculty of Law. 2

4 Technical Experts and Researchers: Mr. Galo Carrera, Geodesist, Geometrix Inc., Mr. David H. Raymond, Cartographer, Centre of Geographic Sciences, Nova Scotia Community College, Mr. Brian Cuthbertson. For Newfoundland and Labrador Government Representatives: Counsel: Mr. Brian Maynard, Deputy Minister, Department of Mines and Energy, Mr. Adam Sparkes, Department of Mines and Energy, Mr. Dan MacKenzie, Resource & Economic Policy, Intergovernmental Affairs Secretariat. Professor Donald M. McRae, University of Ottawa, Faculty of Law, as Agent and Counsel, Ms. Deborah Paquette, Department of Justice, as Deputy Agent and Counsel, Mr. L. Alan Willis, Mr. Brian A. Crane, Gowling Lafleur Henderson, Professor John H. Currie, University of Ottawa, Faculty of Law, Ms. Ritu Gambhir, Gowling Lafleur Henderson. Technical Experts and Researchers: Mr. Ron Gélinas, Lindquist Avey Macdonald Baskerville, Mr. Mike Comeau, Lindquist Avey Macdonald Baskerville, Mr. Fred Allen, Department of Mines and Energy, Mr. Robert Pitt, Canning & Pitt Associates, Mr. Stratford Canning, Canning & Pitt Associates. THE ARBITRATION TRIBUNAL Composed as above, Makes the following Award: On May 31, 2000 the Federal Minister of Natural Resources, Ralph Goodale, following consultation with the Parties, advised of his decision to establish an arbitration 3

5 process with two distinct phases to resolve the dispute relating to the line dividing the respective offshore areas of the Province of Nova Scotia and the Province of Newfoundland and Labrador. The Arbitration Tribunal was established under the dispute settlement provisions of the Canada-Newfoundland Atlantic Accord Implementation Act, and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. The Federal Minister set out the constitution, membership of the Tribunal and the procedure for the arbitration in the Terms of Reference. The Terms of Reference are found in the attached Appendix A. 1. The Establishment of the Tribunal and its Terms of Reference 1.1 The Tribunal was established pursuant to the Canada - Newfoundland Atlantic Accord Implementation Act 1 (hereinafter the Canada-Newfoundland Act ) and the Canada - Nova Scotia Offshore Petroleum Resources Accord Implementation Act 2 (hereinafter the Canada-Nova Scotia Act ). Each of these Acts provides for joint administration and provincial revenue sharing with the Federal Government in respect of the offshore area of each province. This area is defined in each Act, in a way described in more detail in what follows. 1.2 A dispute has existed for many years between the two provinces concerning portions of the limits of these offshore areas. A principal focus of the dispute is the Laurentian Channel, ie., the area seaward of Cabot Strait. (The general area of the dispute, with relevant features is shown on Map 1 which is the frontispiece to this Award.) Both Acts provide in identical terms for the settlement of such disputes. 3 They provide that if the Government of Canada is unable by means of negotiation to bring about a S.C. 1987, c. 3. S.C. 1988, c. 28. Canada-Newfoundland Act, s. 6; Canada-Nova Scotia Act, s

6 resolution of a dispute within a reasonable time, the dispute shall be referred to an impartial person, tribunal or body at such time as deemed appropriate by the Federal Minister of Natural Resources, in consultation with the provinces concerned. The Federal Minister is also charged with the responsibility of determining the constitution and membership of the tribunal or body and the procedure for the settlement of the dispute. Where such procedure involves arbitration (as is the case here), the arbitrator is required to apply the principles of international law governing maritime boundary determination, with such modifications as the circumstances require. The relevant provisions read: (2) Where a dispute between the Province and any other province that is a party to an agreement arises in relation to a line or portion thereof prescribed or to be prescribed for the purpose of the definition offshore area in section 2 and the Government of Canada is unable, by means of negotiation, to bring about a resolution of the dispute within a reasonable time, the dispute shall, at such time as the Federal Minister deems appropriate, be referred to an impartial person, tribunal or body and settled by means of the procedure determined in accordance with subsection (3). (3) For the purposes of this section, the person, tribunal or body to which a dispute is to be referred, the constitution and membership of any tribunal or body and the procedures for the settlement of a dispute shall be determined by the Federal Minister after consultation with the provinces concerned in the dispute. (4) Where the procedure for the settlement of a dispute pursuant to this section involves arbitration, the arbitrator shall apply the principles of international law governing maritime boundary delimitation, with such modifications as the circumstances require. 4 The Federal Minister is given power unilaterally to delineate the offshore area for the purposes of each Act in order to give effect to the award of an arbitral tribunal. 5 4 Canada-Newfoundland Act, s. 6; Canada-Nova Scotia Act, s. 48 with minor variations in subsection (1). 5 Canada-Newfoundland Act, s. 6(5); Canada-Nova Scotia Act, s. 48(5). 5

7 1.3 Having been unable to bring about a resolution of the dispute by means of negotiation, the Federal Minister, pursuant to these provisions and with the consent of the Parties, on March 31, 2000, referred the dispute to this Arbitration Tribunal and set out its constitution, membership of the Tribunal and the procedure in the Terms of Reference. The Terms of Reference, as already noted, are found in the attached Appendix A. In particular, the Terms of Reference thus describe the mandate of the Tribunal: ARTICLE THREE THE MANDATE OF THE TRIBUNAL 3.1 Applying the principles of international law governing maritime boundary delimitation with such modification as the circumstances require, the Tribunal shall determine the line dividing the respective offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia, as if the parties were states subject to the same rights and obligations as the Government of Canada at all relevant times. 3.2 The Tribunal shall, in accordance with Article 3.1 above, determine the line dividing the respective offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia in two phases. (i) (ii) In the first phase, the Tribunal shall determine whether the line dividing the respective offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia has been resolved by agreement. In the second phase, the Tribunal shall determine how in the absence of any agreement the line dividing the respective offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia shall be determined. 1.4 Two matters should be noted about the mandate. The first has to do with the applicable law. Article 3.1 provides that in applying the principles of law governing maritime boundary delimitation with such modifications as the circumstances require, 6

8 the Tribunal is instructed to do so as if the parties [the two provinces] were states subject to the same rights and obligations as the Government of Canada at all relevant times. The quoted addition to the words in the Acts, as well as the extent to which the applicable law may be subject to modification in the present phase of the arbitration, will be examined below in part The second matter to be noted about the mandate concerns the order in which the Tribunal must deal with the basic issues before it. Article 3.2 requires the Tribunal to determine the line dividing the respective offshore areas of the two provinces in two phases. In the first phase, the Tribunal is called upon to determine whether that line has been resolved by agreement. In the absence of such agreement the Tribunal is, in the second phase, to determine the line dividing the respective offshore areas of the two provinces. In the first phase, it is incumbent on the Tribunal to examine the conduct of the Parties, described with more particularity later, so far as it is relevant to the issue to be determined at this stage. That issue is solely whether the boundary between the two provinces has been resolved by agreement. Questions of the conduct of the Parties are examined only from this point of view. This is without prejudice to the Tribunal s consideration of the possible relevance of such conduct to the delimitation of the boundary to the extent that the Tribunal finds that the boundary, or any part of it, has not been resolved by agreement. 2. The Arbitration Proceedings 2.1 The procedure for Phase One of the arbitration is described in Article 4 of the Terms of Reference as follows: 4.1 The following procedure will apply in Phase One: (i) Within three (3) months of the establishment of the Tribunal, the Parties shall file Memorials on the question of whether, in accordance with Article 3.2(i) above, the line dividing the 7

9 respective offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia has been resolved by agreement. (ii) (iii) (iv) Within one (1) month after filing of the Memorials, the Parties shall file Counter Memorials. Within one (1) month after filing of the Counter Memorials, the Tribunal shall convene an oral hearing. Within two (2) months after the oral hearing the Tribunal shall render its decision. 2.2 After consulting the Parties, the Tribunal appointed Heather M. Hobart, B.N., LL.B., LL.M., an associate with Stewart McKelvey Stirling Scales, as Registrar for the Tribunal, under Article 2.4 of the Terms of Reference. 2.3 The Tribunal, in accordance with Article 8 of the Terms of Reference, met with the Parties on September 5, 2000, in Fredericton, New Brunswick. Prior to the meeting, the Parties agreed to extend the time periods found in Article 4 of the Terms of Reference, as permitted under Article 8.7 of the Terms of Reference. The following persons attended the meeting: Mr. L. Yves Fortier, Mr. Stephen L. Drymer, Mr. Jean G. Bertrand, Dr. Patricia Waring-Ripley, Ms. Margaret L. MacInnes, on behalf of the Province of Nova Scotia; and Professor Donald M. McRae, Ms. Deborah J. Paquette, Mr. Brian A. Crane, Mr. Brian Maynard, Mr. Adam Sparkes, on behalf of the Province of Newfoundland and Labrador. 2.4 On September 15, 2000, the Tribunal issued an Order which recorded a number of the agreements reached by the Parties during the September 5, 2000, meeting including: (1) the date for the oral hearing from March 12 to March 21, 2001; (2) the appointment of a technical expert for the Tribunal; and (3) Nova Scotia s offer to present its case first during Phase One of the hearing. The Order fixed the filing dates for the Memorials and Counter-Memorials as December 1, 2000, and February 15, 2001, respectively. The Order stated as follows: 8

10 As to a possible Phase II of the arbitration, should this prove necessary, the Tribunal intends if at all possible, to conduct the hearing of this phase in November 2001, and it notes the agreement of the parties that the following dates, namely November 19 th to 23 rd and November 26 th to 30 th, would be convenient. In the event that Phase II proves necessary and that the November timetable cannot be met for any reason, the parties are asked to reserve January 21 st to 25 th and January 28 th to February 1 st, 2002 for that purpose; 2.5 The Tribunal, after consulting with the Parties, appointed Mr. David Gray, B.A. Sc., M.A. Sc., P. Eng., C.L.S., Maritime Boundary Specialist, Canadian Hydrographic Service, as Technical Expert. 2.6 The Memorials were filed within the time limits prescribed. Nova Scotia filed a total of four Volumes of material including the Memorial and Annexes Volumes 1, 2 and 3 (1 to 132). Newfoundland and Labrador filed a total of six Volumes of material including the Memorial, Annex of Documents Volumes 1, 2 and 3, Annex of Authorities and Annex of Statutes. 2.7 Counter Memorials were filed by both Parties within the prescribed time limits. Nova Scotia, in addition to filing a Counter Memorial, also filed Annexes Volume 4 (133 to 165). Newfoundland and Labrador filed a Counter Memorial, a Supplementary Annex of Documents, Supplementary Annex of Authorities and Supplementary Annex of Statutes. 2.8 The hearing for Phase One took place at the Wu Conference Centre, University of New Brunswick, Fredericton, New Brunswick from March 12 to March 20, During the hearing the Tribunal heard the counsel of the Parties in the order agreed between them, the Province of Nova Scotia being the first Party to plead. The following counsel and advisors submitted oral arguments on behalf of the Parties: The Honourable John Hamm, Mr. L. Yves Fortier, Mr. Stephen L. Drymer, Ms. Valerie Hughes, Mr. Jean G. Bertrand, Professor Phillip Saunders, on behalf of the 9

11 Province of Nova Scotia; and Professor Donald M. McRae, Mr. L. Alan Willis, Mr. Brian A. Crane, on behalf of the Province of Newfoundland and Labrador. 2.9 Nova Scotia filed additional documentation with the Tribunal during its presentation on March 12, 13 and 19, 2001, including a number of slides referred to during the course of the hearing, a binder containing all of the figures filed by Nova Scotia with its Memorial and Counter-Memorial, Annexes Volume 5 (166 to 173) and Nova Scotia s Complement to Newfoundland and Labrador s Oral Argument Book Newfoundland and Labrador filed additional materials with the Tribunal during the course of its oral presentation on March 15, 16 and 20, The materials included three additional volumes of material: Oral Argument Book Volume 1 (Tabs 1-37), Oral Argument Book Volume 2 (Tabs 38-67) and a binder which contained copies of the slides of the visual materials presented during the oral presentation On March 16, 2001, two questions were put to the Parties by the Tribunal. The questions were: 1. In the event that the Tribunal were to hold that there is a binding agreement between the Parties as to the line extending out to the Atlantic, what would be the effect on that agreement of the award of the Tribunal in the St. Pierre Miquelon case? 2. Precisely which modifications in the view of the Parties are required by the circumstances to the principles of international law governing maritime boundary delimitation, having regard to the requirement that the Parties are to be treated as if they were states subject to the same rights and obligations as the Government of Canada at all relevant times? 2.12 The Parties filed responses to the questions posed by the Tribunal on March 23, Nova Scotia filed a complete copy of the Report on the Rights of the Provinces of 10

12 Nova Scotia, New Brunswick and Prince Edward Island to the Ownership of Adjacent Submarine Resources Nova Scotia argued that an agreement existed between Nova Scotia and Newfoundland and Labrador which effected the delimitation of their respective offshore areas. This agreement, it was submitted, was entered into in 1964 by the premiers of the Atlantic Provinces, an agreement to which Québec subsequently adhered. The terms of the 1964 Agreement were, it was argued, confirmed by the subsequent conduct of the Parties Nova Scotia requested that the Tribunal declare that the line dividing the respective offshore areas of the Province of Nova Scotia and the Province of Newfoundland and Labrador has been resolved by agreement Newfoundland and Labrador argued that a line dividing the offshore areas between Nova Scotia and Newfoundland and Labrador has not been resolved by agreement, that there was no evidence of an intent on the part of Newfoundland and Labrador to be legally bound by any agreement or to follow a particular line. Nova Scotia, it was argued, failed to establish the line dividing the respective offshore areas of Newfoundland and Labrador and Nova Scotia has been resolved by agreement Newfoundland and Labrador requested that the Tribunal determine that the line dividing the respective offshore areas of the Province of Nova Scotia and the Province of Newfoundland and Labrador has not been resolved by agreement The case was ably and fully argued by both the Province of Nova Scotia and the Province of Newfoundland and Labrador. Both Parties submitted extensive documentation. 6 Prof. Gérard V. La Forest, Fredericton, New Brunswick (September 16, 1959). 11

13 3. The Applicable Law 3.1 As noted above, Article 3.2 of the Terms of Reference unambiguously requires the Tribunal, in this first phase, to determine whether the offshore boundary between the Parties has been resolved by agreement and to do so in accordance with Article 3.1. Article 3.1 requires the Tribunal to apply the principles of international law governing maritime boundary delimitation with such modification as the circumstances require, and to do so as if the parties were states subject to the same rights and obligations as the Government of Canada at all relevant times. 3.2 According to Nova Scotia, these provisions are unambiguous. The principles of international law governing maritime boundary delimitation are to be applied in determining whether the boundary has been resolved by agreement, and for that purpose the Parties are to be treated as if they were, at all relevant times, independent states subject to the same rights and obligations as the Government of Canada. 3.3 According to Newfoundland and Labrador, on the other hand, neither the Terms of Reference nor the Accord legislation 7 should be interpreted as requiring the Tribunal to apply international law standards of treaty making to the acts of provincial premiers and officials. The legislation refers only to the principles of international law governing maritime boundary delimitation. Even if those principles in the international context defer to boundaries established by agreement, they should not be read as hypothetically applying the law of treaties to the provinces, a process which would be contrary both to the facts and to the law actually governing the transactions on which Nova Scotia relies. But Newfoundland and Labrador also argued that, even if international law were to be applied to this question, and even if the Parties were treated as if they had been states at all relevant times, the boundary would not have been resolved by agreement. This was because the Parties never had the intention of 7 The Accord legislation includes the Canada-Nova Scotia Act, and the Canada-Newfoundland Act. 12

14 entering into an immediately binding agreement resolving that issue, as distinct from agreeing on the terms of successive proposals to be put to the Federal Government. These proposals were always understood to require federal concurrence and implementation, and in particular to require legislation at both the federal and provincial level. Accordingly, they were never binding on the provinces, nor could they be treated as such by applying (fictionally and retrospectively) the standards of international law for a binding agreement. 3.4 In dealing with these arguments, the Tribunal will first review the legal position, under Canadian law and international law, with respect to agreements as to maritime boundaries. (a) Requirements under Canadian Law for a Binding Agreement on Maritime Boundaries 3.5 In its two decisions on offshore jurisdiction the Supreme Court of Canada held expressly that the territory of the provinces does not extend to the territorial sea as distinct from historic internal waters, and a fortiori that the provinces do not include areas of continental shelf. 8 Jurisdiction over the continental shelf under Canadian law is exclusively a matter for the Federal Government. The same results were reached in the Tidelands cases in the United States 9 and Australia Reference re: Offshore Mineral Rights of British Columbia, [1967] S.C.R. 792; Reference re: the Seabed and Subsoil of the Continental Shelf Offshore Newfoundland, [1984] 1 S.C.R. 86. United States v. California, 332 U.S. 19 (1947); United States v. Louisiana, 339 U.S. 699 (1950); United States v. Texas, 339 U.S. 709 (1950); United States v. Louisiana, 363 U.S. 1 (1960); United States v. Florida, 363 U.S. 121 (1960); United States v. Louisiana, 420 U.S. 529 (1960); United States v. Florida, 420 U.S. 531 (1975); United States v. Maine, 420 U.S. 515 (1975). 10 New South Wales v. Commonwealth (1975), 135 C.L.R. 337 (Aust. H.C.). 13

15 3.6 Section 3 of the Constitution Act, 1871 (formerly the British North America Act, 1871, Vict., c. 28 (U.K.)) provides that: The Parliament of Canada may from time to time, with the consent of the Legislature of any Province of the said Dominion, increase, diminish, or otherwise alter the limits of such Province, upon such terms and conditions as may be agreed to by the said Legislature, and may, with the like consent, make provision respecting the effect and operation of any such increase or diminution or alteration of territory in relation to any Province affected thereby. Thus to the extent that any agreement between the provinces would have required a change in the limits of such Province, for example by the addition to the province of areas of internal waters, section 3 requires that the change be implemented by a combination of federal and provincial legislation. No doubt questions might have been asked whether the recognition of jurisdiction or rights over the continental shelf would amount to a change in the limits of a province within the meaning of section 3. Under international law as well as in national practice, the continental shelf has been treated as adjacent to the territory of the state rather than as part of it. This is consistent with the conception of the continental shelf as a zone of sovereign rights beyond the territorial sea and internal waters. In the words of the International Court of Justice, the continental shelf is a zone of only sovereign rights and functional jurisdiction. 11 However, it is clear that the initial provincial proposals for offshore jurisdiction were conceived of as proprietary and as involving claims to territory and ownership. Moreover they envisaged legislation pursuant to section 3: this was expressly provided for in paragraph 6 of the Joint Statement of (hereinafter the Joint Statement ) as well as in subsequent discussions Case Concerning Maritime Delimitation and Territorial Questions Between Qatar and Bahrain (Qatar v. Bahrain) Merits, judgment of March 16, 2001, para Joint Statement re: Atlantic Premiers Conference Halifax, Nova Scotia, (September 30, 1964) (NL Annex 11, NS Annex 24). Paragraph 6 of the Joint Statement is reproduced in paragraph 4.16 below. See in particular the exchange between Prime Minister Pearson and Premier Smallwood at the Federal 14

16 3.7 In cases where some legal result can only be produced by parliamentary action, the executive cannot validly contract so as to fetter that action. 14 This is an aspect of the principle of parliamentary sovereignty. And if the provincial premiers could not by agreement validly bind their own provinces to any boundary change, a fortiori they could not bind the Parliament of Canada. It follows that no executive agreement as to the location of a provincial boundary could be legally effective as such. Again, a fortiori the premiers could not validly agree on inter-provincial boundaries in respect of areas which appertain not to the provinces but to the Federal Government. 3.8 Even in respect of matters not requiring legislation under section 3 of the Constitution Act, 1871, the powers of the provinces to conclude valid executive agreements are limited. As a general matter, governments cannot under Canadian law validly contract so as to fetter their future executive action; 15 nor can they by executive agreement (whether or not a contract) bind the subject. 16 The courts have recognized that there is a sphere of public law agreements which, if they are intended to be binding and are acted upon as such, can produce legal effects. Some agreements, may require the backing of provincial legislation, and such agreements cannot validly commit the province in the absence of legislation. Where, on the other hand, the commitments under an agreement are limited to actions within the scope of provincial executive power, an inter-provincial agreement may be recognized as valid and may give rise Provincial Conference on July 21, 1965, (NL Annex 21), cited below, paragraph Attorney-General for British Columbia v. Esquimalt and Nanaimo Railway Co., [1950] A.C. 87 (P.C.); Reference re: Canada Assistance Plan, [1991] 2 S.C.R See G.H.L. Fridman, The Law of Contract in Canada 4 th ed. (Toronto: Carswell, 1999) at 29: there can be no intent to contract on the part of a government where the arrangement that is said to constitute a contract purports to bind the Crown or a legislature to promote legislation or would limit the legislature s power to repeal or amend legislation. Rederiaktiebolaget Amphitrite v. R., [1921] 3 K.B. 500; Commissioner of Crown Lands v. Page, [1960] 2 Q.B. 274 (C.A.) See also Perry v. Ontario (1997), 33 O.R. (3d) 705 (C.A.). Reference re: Anti-Inflation Act, [1976] 2 S.C.R

17 to legal obligations capable of enforcement by any judicial remedy available in the case of a government liability In the present case, no question of remedies arises. The Tribunal is asked to determine the existence of a valid agreement, leaving to the Federal Minister the question of the exercise of powers under the Accord legislation. (b) Requirements under International Law for a Binding Agreement on Maritime Boundaries 3.10 Turning to the issue of maritime delimitation agreements under international law, the present dispute concerns only the delimitation of the offshore boundary between the Parties beyond 12 nautical miles from their respective coastlines or areas of internal waters. Moreover no issue arises as to jurisdiction over fisheries. The dispute concerns only the mineral resources of the seabed. In accordance with the Terms of Reference, the Tribunal is required to apply the principles of international law governing maritime boundary delimitation as if the provinces were states subject at all relevant times to the rights and obligations of Canada. This directs the Tribunal to those principles binding upon Canada which govern the delimitation of adjacent areas of continental shelf Canada ratified the fourth Geneva Convention of 1958 on the Continental Shelf, (GCCS) with effect from February 6, It did so without any reservation. 18 It has 17 South Australia v. Commonwealth (1962), 108 C.L.R. 130 (Aust. H.C.), at 141 (Dixon, C.J.). This was no doubt the basis for Newfoundland and Labrador s concession in argument that the Memorandum of Agreement establishing the Joint Mineral Resources Committee of July 16, 1968 (NL Annex 25, NS Annex 36) was valid. That Agreement envisaged continuing cooperation in respect of maritime resource claims, performance of which fell within the sphere of executive action. See below, paragraph Convention on the Continental Shelf, April 29, 1958, 499 U.N.T.S. 311 (entered into force June 10, 1964). Canada did however make a declaration, recording its view that the presence of an accidental feature such as a depression or a channel in a submerged area should not be regarded as constituting an interruption in the natural prolongation of the land territory of the coastal state into and under the sea. 16

18 not yet ratified the 1982 United Nations Convention on the Law of the Sea (UNCLOS). 19 Thus as a matter of international law, the governing provision, prima facie at least, is GCCS Article 6. This provides, both as to adjacent and opposite states, that the boundary of the continental shelf shall be determined in the first place by agreement between them. Only in the absence of agreement is the boundary to be determined by the principle of equidistance, unless another boundary line is justified by special circumstances The 1958 Convention is not alone in its emphasis upon agreement as the primary means of resolving continental shelf boundary disputes. Under Article 83 (1) of the United Nations Convention on the Law of the Sea, 1. The delimitation of the continental shelf between States with opposite or adjacent coasts shall be effected by agreement on the basis of international law, as referred to in Article 38 of the Statute of the International Court of Justice, in order to achieve an equitable solution. Moreover, in accordance with Article 83 (4), 4. Where there is an agreement in force between the States concerned, questions relating to the delimitation of the continental shelf shall be determined in accordance with the provisions of that agreement. The repeated reference to agreement in the texts is paralleled in the case law on maritime delimitation, from the North Seas Continental Shelf Cases onwards. 20 Thus for the purposes of the present phase of the arbitration, no question arises as to the 19 (1982) 450 U.N.T.S. l l (entered into force November 16, 1994). 20 See e.g., North Seas Continental Shelf Cases, [1969] I.C.J. Rep.4 at 45 (para. 85); Case Concerning Delimitation of the Maritime Boundary in the Gulf of Maine Area (Canada v. United States of America), [1984] I.C.J. Rep. 246 at 299 (para. 112), 311 (para. 154); Case concerning the Continental Shelf (Libyan Arab Jamahiriya v. Malta), [1985] I.C.J. Rep. 13 at 39 (para. 46). 17

19 possible modification or even supersession of GCCS Article 6 by subsequent developments in international law When multilateral conventions refer to the determination of boundaries by agreement or by an agreement, they clearly mean an agreement which is binding on the parties as a matter of international law, i.e., a treaty. Thus if a treaty on maritime delimitation is expressed to be subject to ratification but has not been ratified, it does not determine anything, any more than does an unratified treaty on land boundaries. 21 The fact that two states are ad idem on a boundary, i.e., that they have the same view as to its existence or location, while it may be legally relevant, is not enough to constitute an agreement on the boundary for the purposes of GCCS Article 6 or Article 83 (4) of UNCLOS. It is necessary that their common attitude should have been expressed in an agreement which is binding on them under international law. The Parties to the present arbitration accepted this. On the assumption (which Newfoundland and Labrador denied) that the applicable law for this purpose is international law, the Parties agreed that the question for the Tribunal to determine is the following. If the two provinces had at all relevant times been independent states, would their offshore boundary have been resolved by an agreement binding upon them under international law, i.e., by a treaty? 3.14 The Tribunal notes that it is also possible for a state to be bound in international law by a unilateral statement as to a boundary, especially where such a statement is made by a head of state or government or a minister of foreign affairs with the intention to commit the state. A well known example is the Ihlen Declaration in the Eastern Greenland case. 22 By contrast in the Gulf of Maine case, the Court declined to apply Cf. the unratified Treaty of 1935 in the Case Concerning the Territorial Dispute (Libyan Arab Jamahiriya v. Chad), [1994] I.C.J. Rep. 6 at 27 (para. 57). Legal Status of Eastern Greenland, [1933] I.C.J. Rep. 95 at See also: Nuclear Tests Case (Australia v. France), [1974] I.C.J. Rep. 253 at , Nuclear Tests Case (New Zealand v. France), 18

20 this rule to a statement made by a middle-ranking government official. 23 For the purposes of the present phase of the arbitration, Nova Scotia relies on the two joint statements or communiqués of September 30, 1964 (the Joint Statement) 24 and June 18, 1972 (hereinafter the 1972 Communiqué ). 25 In Nova Scotia s view, these amount respectively to a delimitation and a more precise delineation agreement between the Parties resolving the location of the boundary; the Tribunal should treat these agreements as binding in accordance with international law. The 1964 Joint Statement and the 1972 Communiqué were not unilateral acts. Nova Scotia does not rely in the present phase of the arbitration on any discrete unilateral act, in the nature of the Ihlen Declaration, as resolving the boundary. No question accordingly arises as to whether parallel unilateral acts, binding under international law, might together amount to an agreement resolving a boundary The Parties also agreed that no specific requirements of form exist under international law for a treaty. There is no requirement under international law that a treaty be subject to ratification. 26 Nor is there any requirement as to the designation of the instrument in question or as to the form in which it is signed or approved. 27 What matters, ultimately, is the intention of the Parties to be bound by the agreement under [1974] I.C.J. Rep. 457 at Case concerning Delimitation of the Maritime Boundary, in the Gulf of Maine Area (Canada v. United States of America), [1984] I.C.J. Rep. 246 at Joint Statement re: Atlantic Premiers Conference Halifax, Nova Scotia, (September 30, 1964) (NL Annex 11, NS Annex 24). See paragraph 4.16 for the full text. Communiqué issued following meeting of the Premiers of Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and the Vice-Premier of Québec (June 18, 1972) (NL Annex 48, NS Annex 54). Vienna Convention on the Law of Treaties, May 23, 1969, C.T.S No. 37 Art The Convention does not expressly contemplate a treaty which is subject to no formality of conclusion whatever, e.g., an unsigned communiqué. This would have to fall within the general concluding words of Art. 11 ( The consent of a State to be bound by a treaty may be expressed by by any other means if so agreed ). Canada acceded to the Convention in 1970 and has thus been a party to it since its entry into force in See ibid. at Art. 2(1)(a): treaty means an international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation. 19

21 international law. The International Court of Justice has confirmed this approach in a succession of cases In the Aegean Sea Continental Shelf Case (Greece v. Turkey), Greece sought to establish the Court s jurisdiction based on an unsigned communiqué issued after a meeting of the two heads of government. The Court said: On the question of form, the Court need only observe that it knows of no rule of international law which might preclude a joint communiqué from constituting an international agreement to submit a dispute to arbitration or judicial settlement (cf. Arts. 2, 3 and 11 of the Vienna Convention on the Law of Treaties). Accordingly, whether the Brussels Communiqué of 31 May 1975 does or does not constitute such an agreement essentially depends on the nature of the act or transaction to which the Communiqué gives expression; and it does not settle the question simply to refer to the form a communiqué in which that act or transaction is embodied. On the contrary, in determining what was indeed the nature of the act or transaction embodied in the Brussels Communiqué, the Court must have regard above all to its actual terms and to the particular circumstances in which it was drawn up. 28 The Court, however, held that the communiqué did not amount to an agreement involving any immediate commitment to submit the dispute to the Court. Previous communications between the parties established that the purpose of the Brussels meeting was to discuss the joint submission of the dispute to the Court by agreement, and it was envisaged that experts would meet subsequently to negotiate a special agreement for that purpose. In the circumstances there was no indication that the two Prime Ministers were ready to undertake an unconditional commitment to submit their continental shelf dispute to the Court. 29 This was, however, without prejudice [1978] I.C.J. Rep. 3 at 39 (para. 96). Ibid. at 43 (para. 106). 20

22 to the possible effect of the communiqué in terms of the further efforts of the parties to arrive at an amicable settlement of their dispute In the Qatar v. Bahrain case, by contrast, the Court held that the Doha Minutes, which had been signed by the foreign ministers of the two parties as well as by a third party acting as mediator, constituted a binding agreement containing specific commitments of the parties, including commitments relating to the modalities of invoking the Court s jurisdiction. It held that: the Minutes are not a simple record of a meeting, similar to those drawn up within the framework of the Tripartite Committee; they do not merely give an account of discussions and summarize points of agreement and disagreement. They enumerate the commitments to which the Parties have consented. They thus create rights and obligations in international law for the Parties. They constitute an international agreement. 31 The Court noted that the Minutes were concluded against the background of an earlier exchange of letters which both Parties accepted did amount to an international agreement. Thus the Doha Minutes did not so much create an obligation to submit the dispute to the Court as deal with the modalities by which this was to be done Evidently each case has to be considered in the light of its own circumstances and of the contemporary evidence of the intentions of the parties. Even an unsigned joint communiqué may be held to embody an agreement if this was the actual intention of the parties, and if they agreed that their intention was to be expressed by the issue of Ibid. at 44 (para. 108). Case concerning Maritime Delimitation and Territorial Questions (Qatar v. Bahrain) (Jurisdiction), [1994] I.C.J. Rep. 112 at 121 (para. 25) [hereinafter Qatar v. Bahrain]. Ibid. at 120 (para. 22). In other words, the Court did not hold that the Doha Minutes were an international agreement in isolation, but rather that they were intended to qualify and particularize an earlier treaty commitment as to the settlement of the dispute. Cf. however Oda, J. (dissenting), at , who held that neither the exchange of letters nor the Doha Minutes constituted an international agreement. 21

23 the communiqué. But if questions of form are not decisive they are nonetheless relevant. The absence of a signed document, especially on a matter of importance such as the determination of an international boundary; the use of language which is vague or which does not appear to embody any immediate commitment; a shared understanding between the parties to negotiations that their in principle agreement is to be embodied in some later formal document or is to be subject to some subsequent process of implementation in order to become binding such factors may together or separately lead to the conclusion that a statement does not constitute a binding agreement under international law A factor sometimes referred to as indicative of an intention to enter into treaty relations is the status and powers of the negotiators. According to Article 7 of the Vienna Convention on the Law of Treaties, the following are considered as representing their State without having to produce full powers: 2(a) Heads of State, Heads of Government and Ministers for Foreign Affairs, for the purpose of performing all acts relating to the conclusion of a treaty; 33 Thus the representative capacity of a heads of state or governments or ministers of foreign affairs is established by virtue of their offices, and they do not need to produce full powers. On the other hand it does not follow that these officials (like the others mentioned in Article 7) automatically have the competence to bind the state in respect of any particular category of treaty in any given case. It may be apparent from the practice of the parties or from the circumstances that a particular agreement expressed by an Article 7 official is not the final word and that some further action or approval is required. Again whether this is so depends on the facts of each case, and on the understanding that the other state party would have, conducting itself in the matter 33 Vienna Convention on the Law of Treaties, May 23, 1969, C.T.S No

24 in accordance with normal practice and in good faith. 34 With respect at least to those senior officials mentioned in Article 7(2)(a), the other state party acting in good faith may well be entitled to treat them as having the necessary authority to commit the state by mere signature. But whether this is the case will depend on the practice of the parties and on what has been said in respect of the particular transaction This issue arose in the Qatar v. Bahrain case. The Bahraini Foreign Minister who signed the Doha Minutes was clearly able to do so, by virtue of Article 7, without producing full powers. Bahrain nonetheless argued that according to its Constitution the Foreign Minister could not commit the state to a treaty concerning territory without its positive enactment as a law. Accordingly, it was said, the Foreign Minister did not have and could not have had any intention to sign a legally binding agreement. The Court rejected the argument, on the ground that the text itself implied immediate commitments for the two parties: The two Ministers signed a text recording commitments accepted by their Governments, some of which were to be given immediate application. Having signed such a text, the Foreign Minister of Bahrain is not in a position subsequently to say that he intended to subscribe only to a statement recording a political understanding, and not to an international agreement. 35 In any event, if the 1987 exchange of letters had already committed the parties to judicial settlement of their dispute, it could hardly have appeared to Qatar, acting in good faith, that the Foreign Minister was not authorized to deal with the modalities of the submission. Such an agreement was not, on the face of it, one relating to the territory of the state, and if the Foreign Minister was under constitutional constraints he should have communicated them to the other party Ibid. at Art. 46(2). Case concerning Maritime Delimitation and Territorial Questions (Qatar v. Bahrain), [1994] I.C.J. Rep. 112 at 122 (para. 27). 23

25 3.21 The premier of a Canadian province is not an Article 7 official. But a premier is a head of government. The Tribunal is directed by the Terms of Reference to apply international law to the facts of the present case as if the parties were states. On this basis, Nova Scotia forcefully argued that the premiers must be taken to have had the authority to commit their provinces to a boundary agreement binding in international law. All that would be necessary is that their intention to do so should sufficiently appear from the relevant documents. No doubt it was true, as a matter of Canadian law as now authoritatively declared by the Supreme Court of Canada, that neither Nova Scotia nor Newfoundland and Labrador had the competence to agree upon their maritime boundaries, since at all relevant times they had no jurisdiction over the offshore and therefore no abutting maritime boundaries. The offshore areas pertained to Canada and not to the provinces. But the Terms of Reference require the Tribunal to treat the provinces as if they were states, and coastal states in their situation would have had valid entitlements to adjoining offshore areas and could have entered into an agreement delimiting them. Having done so, they could not have relied on their internal law as a justification for failure to comply with the agreement Even if the Tribunal were to proceed on the assumption that the provinces had something to divide, Newfoundland and Labrador argued, it would not follow that the premiers had the authority, acting through the medium of an unsigned communiqué, to bind their provinces as to an actual delimitation. As a matter of Canadian law, evidently, they lacked such authority since changes in provincial boundaries required 36 Vienna Convention on the Law of Treaties, May 23, 1969, C.T.S. 1980, No. 37, Art. 27. This rule is subject to Art. 46, which deals with manifest violations of rules of internal law of fundamental importance. Since a continental shelf delimitation agreement would seem not to involve changes in the limits of a province, it would not have been open in such a case for either party to invoke section 3 of the Constitution Act, 1871 as an excuse for non-performance. The hypothetical treaty would have been valid under Art

26 legislative action pursuant to section 3 of the Constitution Act, 1871 or otherwise. In the circumstances, the most the premiers could have done in terms of executive action was to enter into some modus vivendi or understanding as to the licensing practice of their respective provinces, pending the formal implementation of any eventual offshore accord. Thus, according to Newfoundland and Labrador, even if international law was to be applied, after the event and on the hypothesis that the provincial premiers were to be deemed heads of sovereign governments, this could not alter the fact that their actual intentions in 1964 or 1972 were inevitably coloured by the circumstances in which they were acting. In those circumstances, according to Newfoundland and Labrador, even if the provinces are to be deemed to have had the authority to agree, the premiers could not have had, and did not have, the relevant intent to enter into immediate binding commitments The Tribunal accepts that there are difficulties in applying the international law of maritime boundary delimitation to the question whether provincial premiers have entered into a binding agreement. International law, identified as applicable in the Accords 37 and in the implementing legislation, did not govern and was not thought of as governing the transactions on which Nova Scotia relies, and its retrospective application to those transactions is not straightforward. On the other hand, the federal Accord legislation does not purport to attribute offshore areas to the provinces, still less to change provincial boundaries. 38 That legislation, and the mirroring provincial legislation, 39 allows the Federal Government by regulation to change the definition of Atlantic Accord: Memorandum of Agreement between the Government of Canada and the Government of Newfoundland and Labrador on Offshore Oil and Gas Resource Management and Revenue Sharing. (February 11, 1985) (NL Annex 100, NS Annex 1); Canada-Nova Scotia Offshore Petroleum Resources Accord (August 26, 1986) (NL Annex 108, NS Annex 2). See Canada-Nova Scotia Act, s. 2, definition of offshore area ; Canada-Newfoundland Act, s. 2, definition of offshore area. Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act, S.N.S. 1987, c. 3; Canada-Newfoundland Atlantic Accord Implementation Newfoundland Act, S.N. 1986, c